Things to consider for Setup of New Business in Dubai
Things To Consider For Setup Of New Business In Dubai
Dubai is the land of vast business opportunities and innovative commercial interventions across the world. The approach and will power of the government of Dubai have made this world popular tourist destination to the most investor-friendly and fast growing market in the middle east. Being prominent with development in every sector, the rulers of this magnificent land is attracting potential investors from all over the world.
To utilize from plenty of business opportunities available in Dubai, an investor should understand the trends and scope of his type of business in Dubai. You need to get acquainted with the various facts associated with a business startup in Dubai and also should learn on managing a profitable enterprise in the UAE. Even though the government is providing approachable business setup procedures, professional guidance from business setup consultants for a new business will ease and support the investor in major.
Getting on a professional business setup consultant in Dubai will complete all the procedures and formalities to begin with your dream business. A mutual proceeding with in detail study and research on every stage of the setup will ensure the success of the business. To successfully register your new business setup in Dubai, thorough understanding on the business setup procedure in Dubai and dedicated approach on deciding each and everything is required. Expert team of consultants will advise on each stage of new business setup in Dubai, to make you acquainted with sufficient awareness and update.
Important things to consider for your new business setup in Dubai:
Following are the major things that an investor should study well, forecast and act in order to establish new business setup in Dubai.
Kind of Business and its scope and importance in Dubai
Choosing on the right kind of business activity that will satisfy the standards and get approval in UAE is the prime factor in the new business setup in Dubai. It is advised to choose on the business plan followed by a field study and expert advises, as the published information or any other means of popularity does not guarantee the scope.
Type of Business establishment
Investors decision to choose the type of business from various business options such as mainland business setups, free zone company formations, and offshore business establishments. Opting for the right jurisdiction depends on the business activity and the nature of the business you would like to perform in UAE.
As per the Federal Law, it is mandatory for a commercial company in Dubai to have not less than 51% local equity and a 49% from foreign investor. Below are the types of companies permitted to establish in Dubai.
- Sole Proprietor Company
- General Partnership Company
- Partnership Commendams
- Limited Liability Company (LLC)
- Joint Venture Company
- Public Shareholding Company
- Private Shareholding Company
- Professional Company
Investors and local sponsor can fix on the shareholding structure of the new business setup in Dubai, only after understanding legal provisions on investors as per federal law of UAE, with each type of legal form of company. The shareholding structure should be decided by understanding your business operation and preferred jurisdiction. Below are the shareholding structures that can be opted for new business setup in Dubai.
- Limited Liability Company
- Sole Proprietorship
- General Partnership
- Partnership in Commendams
- Public Shareholding
- Private Shareholding
- Joint Venture
- Shared Partnership
- SME License
- Representative Offices
- Branch Offices
- Limited Partnership
Best local sponsor
Any non GCC business aspirants looking for a Company formation in Dubai is not legally advised to begin an investment without any Emirati sponsor Whereas if you are setting up company in a free zone, or your business activity is covered by a professional services license, a local sponsor in Dubai is not required. UAE Companies Law and UAE Civil Law, to start a company with limited liability in a mainland, that is, a non-offshore company in a non-free zone, a minimum of 51% local equity is a must. Despite foreign equity in such a company not exceeding 49%, the profit distribution from it can be mutually agreed upon by concerned parties.
It is best to get into an agreement with a silent partner- this will assure security and complete control on your business and also developing a rapport with your sponsor will help you in sorting out any problems you may face along the way with authorities.
Right trade name
You need to give a name to your company as per the standards mentioned by the Department of Economic Development (DED). The trade name acts as an identity of your business, and thus DED emphasizes on associating the name as per the license type. It should be consistent and in proportion with the commercial activity of the firm. The firm name should be identical to the trade name. Both names must include one or more of the partners’ names and followed by the phrase “Private Shareholding Company”.
License and Approval
Upon furnishing all documents and successfully completing procedures, you will get approvals from concerned departments. Careful submissions and filing will lead you with a flawless registration of new business setup in Dubai. DED dispenses trade license to businesses and deals with investors. But, at times you may require external approvals to start your business. Generally, these permissions are acquired by the non-governmental & semi-governmental bodies.
Investors are required to apply for the license based on the fundamental activity of business. Concerned departments are responsible to accept the application for 3 categories of licenses in Dubai.
Usually given for business focusing on any kind of trading activity in Dubai. Commercial license is a common type of license to do all type of retail and wholesale trading business.
For setting up a manufacturing or industrial activity, application to grant an industrial license is required.
Meant for artisans, craftsmen, and other professional service providers. Any professionals such as Doctors or Engineers can begin their own firm upon obtaining a professional license from concerned department.
Location and Office for Business
Having a physical existence is obligatory for every business in Dubai. The tenancy agreement, Real Estate Regulation Authority (RERA) documents, and EJARI needs to be submitted, following which the initial approval is granted by the DED. Proper finding of the most suitable location and an office setup with sufficient infrastructure will decide on the performance of business. Based on the type of business and the activities involved, investors should build or rent office space for the business. Immense care should be given on this part, as the physical premises have got much influence on business performances and productivity.
Follow the rules and regulations
New business setup in Dubai can be realized by following each procedure carefully. With the approval from DED to start your business, draft your MOA by approaching a reliable lawyer and proceed ahead with business by completing other formalities on company registration and business license
Clear Documents and follow up
The major thing an aspiring investor should take for of in the new business setup in Dubai, is clear documents and certifications on time. Below are the major documents and certifications required for new business setup in Dubai.
- License Application
- Attested LLC agreement
- Governmental forms
- Name reservation certificate
- Initial approval certificate
- External departments approval
- Tenancy contract
- EJARI registration certificate
- Passport copies partners and NOC for partners (if any)
- Dubai Chamber of Commerce and Industry Registration
- Endorsements from Governmental Agencies (For Gas and Oil Companies)
- UAE Central Bank Approval and License (For Financial Institutions)
- Finance and Industry Ministry Certification (For Manufacturing Companies)
- Economy and Commerce Ministry Certification (For Insurance Companies)
- Health Ministry Certification (For Medical & Pharmaceutical Firms)
Get the best Business setup consultants in Dubai
Appointing a business setup consultant will save your time and money. With a knowledgeable business consultant, who are well-versed with the procedure, company formation can be instant. Business setup consultants act as an agent in between the investor and the government. Professional consultants from this kind of agency will ease several process of documentation and other requirements of a firm on behalf of the investor.
The effort taken by these kind of consultants are mostly welcomed in the industry, as it is not feasible for a common man to get all these formalities done easily. Their expertise in dealing with the local government bureaucracy and with Free Zone Authorities to be of great help in planning and itemize your business startup costs. Business setup consultants offer a team of experts to plan out your type of company registration and guide the investor to follow in order to smoothly setup business.